What is a section 13 notice?
A section 13 notice is used when a landlord is proposing a new rent under an assured shorthold periodic tenancy. This can only be done after the initial fixed-term has elapsed. Use Form 4 to propose a new rent to a tenant located in England.
If the fixed-term of the tenancy has ended and no new agreement has been signed, then the tenancy automatically becomes a periodic tenancy. If the tenancy agreement doesn't provide any information or procedure on a rent increase, then the landlord can only increase the rent by getting mutual agreement with the tenant or by serving a section 13 notice.
How much notice should be given?
For weekly, fortnightly or monthly periodic tenancies, at least 1 months’ notice is required. For yearly tenancy, 6 months’ notice is required. The notice period runs from the date of service of the section 13 notice. This is normally the day that the rent is due. For example, if the tenant pays rent on the 10th day of the month, the date of the rent increase on the section 13 notice must be on the 10th day of the month.
What happens after the section 13 notice has been served?
Once the notice has been served, the tenant has until the date of the rent increase to make a decision. If the tenant doesn't do anything, then the rent will automatically increase and the tenant cannot dispute the rent increase. If the tenant wants to dispute the level of the rent increase, they will need to apply to the First-tier Tribunal (Property Chamber).
The tribunal or committee must receive the application before the rent increase date given on the section 13 notice. Rent must be paid at the previously agreed rate until the tribunal or committee makes a decision. The tribunal can decide that the tenant has accepted the rent increase if they pay the increased rent rate.
Negotiating an increase
It may not be beneficial for the landlord to impose an increase in rent. The tenant may no longer want to rent the property, in which case, the landlord will have to spend time and expense re-letting the property. It may also be an inconvenience for the landlord to find suitable replacement tenants, especially if there was a good relationship with the previous tenants.
The tenant will want to either have the rent stay the same, or have a minimal increase in the rent. Therefore, it could be advantageous to negotiate the rent increase, for example, to include a rent increase both parties are happy with or to roll out the rent increase in incremental stages over a period of time (eg an increase of £25 in the first 6 months and then an increase of £50 for 6 months after that).